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Towards a lean manifesto

Tiny steps make things of beauty

Over a hundred years ago somebody thought it would be a good idea to make everything in tiny little steps. Each step could be done by an idiot pulling a handle. The hard part of the work was working out what the small steps were and how to put them in an order that would produce something as useful and complex as, say, a car. This somebody was Henry Ford.

If you want to make several things you need to reconfigure the more complex machines. Because this takes time and effort you will try and make sure you make lots of pieces with the complex machines before each change over. If you suddenly need to make something else because of a change in demand, the demand will have to wait.

If one of the parts of the long process to make something useful starts making things that are defective in some way the idiot will carry on pulling the handle, because that’s what they are paid to do. They aren’t paid to think or even notice that pulling the handle is making broken things.

You have to ask yourself: why do people think this is a good idea? and, who is the idiot? The person pulling the lever is at least getting paid to do it.

Before this components were made to approximate dimensions and a factory consisted of highly skilled workers putting these parts together and fettling them. Every car was in essence hand made and no two were identical, parts could not be swapped without refitting. This is where the job title of fitter comes from originally. It was a highly skilled craft job. Ford changed all this and made his cars essentially the same, and also made them so that they could be maintained by someone with a decent set of teeth and a hammer.

In essence the discovery that dividing labour up, and making the parts produced by that labour much more standard, and placing them on a moving conveyor where they are assembled in order was the beginnings of what we call mass production now. It didn’t need the highly skilled workers. That said, even Ford’s factory still had people who had the job of fettling cars that weren’t quite right, and they used to ship ones that had faults. It didn’t matter as long as they were being shipped. If you could read and were in possession of the kind of tools you would find in a farm you could get it running and the price was right.

By the way, the assertion that Ford said you can have any colour you want as long as it’s black is a myth. The early model T’s were dark green and navy blue.[^ModelT]

Beauty turns ugly

If you worked in one of these factories you were dehumanised. You were pulling a lever and didn’t need much education. Ford famously paid his workers well. He could afford to because he was producing so many cars at a relatively low cost. He still had a lot of trouble getting enough people to do this, and turnover was quite high.

The highly inflexible approach to building the cars also meant that producing new models was really difficult once the line got rolling. The entire assembly plant had to be reconfigured for every change. A new model could mean months of close down and disruption and then trying to reassemble the workforce you’d laid off.

Inflexibility had another cost, if sequences of operations were done in a way that was suboptimal changing them was nigh on impossible. If you multiply something that even adds a few seconds to a process by several million cars then this becomes a significant cost you can’t do anything about.

Workers could be added and removed depending on the demand, and were regarded as disposable and replaceable, which is how a lot of capitalists still operate.

Once upon a time in the East

After the second world war there was a small company called Toyota trying to make cars for the domestic market in Japan. They didn’t have a lot of capital to buy many different machines, and neither did they have lots of orders for the same kind of car. They also had to cope with a law that said they weren’t allowed to lay people off if they had no work for them. This meant they needed to be able to produce different types of car from the same set of equipment without a lot of ceremony and also that they needed to keep their workers happy and productive for 20 or 30 years.[^MachineThatChangedTheWorld]

Their productivity was about a third of that in Germany. This was in itself a third of the USA. So around 10% of the most productive people around.[^Bryant]

They tried many things and managed to get changing the complex machinery that stamps out body parts down to a few minutes when on paper it should take hours or even days. If things needed to be moved around to make the line run a little quicker they were. Workers were expected to become problem solvers, not beasts of burden. If pulling the handle meant creating defects you pulled a different handle that stopped everything until the problem was solved.

You got paid more depending on your seniority, on what you could bring to the organisation, not on your job title. The more senior you are, the better problem solver you have become. There’s also little point in jumping to another company, you will be paid a lot less and have to start again. The Western approach of having a narrow specialism and then progressing from junior to senior while hopping from company to company did not apply. Taiichi Ohno, one of the shepherds of these ideas, talked about creating work that’s fit for humans. This makes machines the slaves and humans the masters, which is the way it should be.

By the late 1970’s the productivity picture went entirely the other way.

Efficiency

Mass production is obsessed with efficiency, doing each step as fast as possible. Things that are relatively slow end up with piles of stock upstream of them. Things that are relatively fast end up with nothing to do. If each step is run as efficiently as possible you come to find that the system as a whole is anything but efficient. There’s a term for the efficient approach: local optimisation, as in each person optimises what they do with no regard for the system as a whole.

Instead Ohno traded efficiency for effectiveness. Not just doing but doing the right thing. Only making things that need to be made. Effectiveness is making enough to meet the needs of the business with a cadence that minimises the amount of defects, of stopping when defects are found and finding the root cause of them.

Piecework, which is where workers are rewarded for making a number of pieces, is an early form of trying to use targets to make things work properly. But if you have to make 15 widgets to get paid a living wage by the close of the working day you will make them any old how, and maybe try to make some more if you will get paid for them. So the human being will keep pulling the lever because that’s what they’re paid to do by the idiot who owns the lever.

Quality

After something has been made it’s a bit late to see if it works properly. If you have thousands of them and they’re all broken it is also a very expensive mistake. If you optimise each step for its own sake you this is where you end up. Everybody has been doing their best by staring at their feet instead of looking at how what they do fits with everyone else.

If your culture is a problem solving culture, where everyone is listened to, then good quality will just become something you are, rather than something you do after the fact.

Silos

It’s easy to point at manufacturers of stuff and say they should eschew local optimisation in their production processes. It’s also easy say that there are benefits in pulling groups of similar products together and creating systems that can switch between them easily.

In knowledge work we can say that this doesn’t affect us because we don’t make a physical product. We can make sure that our department is as efficient as possible. We can incentivise with targets and arbitrary bonuses.

If you take a few steps back from this and think of the departments that make up an enterprise of any size you will find that you have processes that pass information between them. You will also find that there are places where this information (or stock, in fact) is gathered and starts decaying and becoming a problem. It’s the same issue of local optimisation but hidden away in the rough and tumble of operating a company; you have the departments because that’s what everybody else does. What you know, of course, is that everybody else is also struggling with quality and getting things done but just accepting it as part of the status quo.

In Lean Thinking Womak and Jones talk through a case study of a manufacturer of stretch wrapping machines. They attack the production problems and get a 40% (and more later) increase in capacity without employing any new people, they shrink their lead time from months to less than a week. Because they no longer needed to hold onto lots of unusable stock they did this without needing any more space. They no longer have to ask people to expedite orders because all orders are being delivered on time or early, the average number of defects falls from 6 per machine to less than one. They pay their workers well above the industry average because they are so much more productive so everybody wins. All of this is amazing. Then they realise that their sales process takes up to six weeks.

You need to turn the searchlight on the whole enterprise. Just because you make something intangible doesn’t mean you shouldn’t question your thinking and how you do things. In some ways it’s much easier for you because you haven’t got the expense of moving heavy machines about to make your production lines more effective, in others it’s bad because you don’t see the pain. A pile of physical things costing you money and decaying into worthlessness is easier to see.

The silo metaphor is used to describe the separation of concerns into their own departments. People work for departments, not the enterprise, and their objectives align with that narrow view. Then of course we can start playing the blame game. A siloed organisation is maladaptive and usually blind to its own faults. This is one of the reasons small companies are much more nimble – they have less silos, less accretion of bony substance to choke on.

For those readers who work in the IT function, this is why you are always the blame monkey: you have too many masters. More enlightened organisations that are now breaking their offerings down into product groups or using product focussed multi functional teams that have the job of meeting specific customer needs directly without having to go and beg for resources from several different departments. This usually means the middle management tier are no longer required. Their job was originally to co-ordinate between the silos. When you have no silos you don’t need to negotiate and there are no empires to defend. These companies are winning, they actually manage do do the more with less mantra without it being another corporate self delusion.

Value

The thing to pursue in your quest for effectiveness is value. Value is that thing that your customer has in their hand and wants to pay you for. Whatever you do, this is what matters. If you look at what you do and can’t see value then you know that you should stop doing it.

One of the first things that you need to be able to do is see what your constancy of purpose is – whose problems do we solve, how, and what makes us special? This gives you your value proposition. Then you can use this to examine what you do and throw out all of the things that don’t fit. It’s very liberating.

The British Olympic rowing team spent 4 years with the mantra does it make the boat go faster? They took this single minded approach after losing by a few hundredths of a second. It meant that every decision they made suddenly became easier, there was no deed for debate. If it goes faster, keep doing it, if not stop doing it. Very simple.

Flow

A customer expresses a need. The steps you follow and information passed between people to meet that need are the flow. The flow is different for each organisation, even in the same industry each will have its own history and steps it follows when the people working there worked out how to do things. This is why best practice is often a myth. Unless of course that best practice is a way of thinking about customer needs.

You can go on waste walks, where you follow a customer need for value all the way through and look for where you are doing things you shouldn’t. Ohno had three things he used to say you need to do when working to improve things.

Go see

Ask why

Show respect

In the West we are awful at showing respect and we often stop at the first answer when asking why. Ohno developed a technique called the 5 whys – you keep asking why until the primary reason is uncovered. It may well be a lot more than 5 times, or only two or three. One of the main purposes of this is to get past the blame game and off to the root causes of problems.

Showing respect means that you should never treat the people doing the work like idiots or fools. They are doing what they were told to do, and if there is anything they perhaps shouldn’t be doing it’s roots lie in how the work was originally organised. Quite often they know a better way and can tell you what it is once you remove the earplugs of arrogance and compromise.

Dirty flow

If the next step in a process can’t happen because the information or thing passed to it is wrong or incomplete then you have to go back and fix it. The flow is dirty. This is often a place where you find hidden costs, and is often why silos are so bad – the problems inside each department aren’t obvious because that department works well in its own terms. It’s only when you look at the interfaces you start to see where the pain is.

This is why the purchasing department buys cheaper tools that make the creation of defective products so much easier. This is why competing on costs is an insanely bad idea.

Visualise the work

One of the most useful and easy things you can pick up from this is the Kanban board. Kanban just means something like sign in Japanese. The boards are used so that everybody working can see where the work pieces are. They also limit the work in progress (WIP), if you hit a WIP limit you know there’s a problem before it causes you a lot of pain.

You can create Kanban boards for every endeavour, I use Personal Kanban, which in essence consists of the sentences visualise the work and limit the WIP for most of my work. I have to switch between projects so I have many boards.

It doesn’t have to be a board, people have used mind maps. When I ran a workshop recently someone just drew a picture with some illustrations of that things looked like and some arrows. The important thing is that everyone can see what’s going on.

Compromise is bad

Good enough isn’t good enough. If you only expect 80% from a process or person then you will be lucky to get 50%. Always striving for 100% means you can uncover ways to improve. Again this means leaving egos at the door and questioning everything.

Goldratt’s book The Choice talks about his approach to problem solving. He was regarded as a genius by many of the people he worked with because he could see problems with great clarity.

Goldratt would look at very complex seeming systems in manufacturing, retail or project management and seem to be able to get to the kernel of what they are about. In the book he says that it doesn’t matter what the veneer of complexity is (one company profiled makes hundreds of products with a bewildering variety of products and variations) you can find a couple of simple levers that drive the whole business. He insists that it’s not genius, it’s taking the time to see clearly and not compromising on good enough.

He said was that we become habituated to difficult problems and start living with them. This cognitive blindness means that usually takes an external consultant or new manager to point out there is a better way. In order to reduce conflict we compromise with whatever’s causing the pain and then act like it can never change. You should never listen to or be taken in by compromises like this. Just as there is always a simple lever, and there is always a way to address problems where everybody wins, you just have to push really hard at it.

Typically his consultancy would find huge savings by applying their knowledge of constraints for the client, and then find at least the same again by helping the client work out problems with suppliers and customers, and then find even more by going around the loop again. Never believe you’ve finished in the process of improvement. Today’s great idea can work for a while and then become a bad idea. Things change – it’s the only certain thing in life.

Ohno would strive to improve product lines that were being phased out until the very last day, you can still learn from the improvements and why not keep your money in your pocket?

Slack

If you work for an efficient organisation and dare to be stood around you will be told to find something to do. Effective organisations have slack, where people can think about things and also where they are available to meet short term needs or swarm on problems. In finance they talk about liquidity, which means that not all of the resources are committed. Some of them are kept back so that they can be used to overcome short term problems in the market. You can do the same thing with people. But, please, stop calling them resources. Staplers and pencils don’t have initiative or drive, they are very bad at problem solving without the help of a friendly human.

Experimentation

Not all of the changes you try will have a positive effect, sometimes they will make things worse. This is part of discovering what works. You need to have experiments that can fail without destroying the company. You also need to say what success and failure look like before you make any changes. You may not be able to say anything quantitative, or only guess at an improvement. This is fine.

We have been involved in a lot of software changes where all we were supposed to do was ratify a pet idea coming from the board. So there wasn’t any point in calling it an experiment or even collecting any data. If you are doing this just be honest about it or it devalues the process.

Small batches

An accidental product of the Toyota way of organising work was they used small batches to make relatively small runs of specific cars. Then they realised that this meant they were only making what they needed to without having to create a lot of stock and the machines were running at the right cadence to deliver.

Jim Benson, one of the originators of Personal Kanban, says that big batches can kill and I agree with him. They take up space, they decay over time, and if you have introduced defects you end up with lots of them instead of a few you can throw away or recycle.

This also means that you probably don’t run into constraints in the way Goldratt talks about, where they control the whole process. Small batches and reasonable buffers stop constraints from … constraining you. That said, understanding Goldratt’s ideas gives you some more tools if you become stuck.

Buffers

If there are a lot of steps to deliver value you can have one of them stop working for a while because stuff happens. You need to be able to keep moving, so having a small buffer upstream of any complex or expensive processes means you can keep running while you sort it out. These processes are your constraints.

Projects are evil

If you want a can of beans you can go buy one. If you want to do something new or different with your customer you can’t go buy that capability. Projects start from the false assumption that you can buy things like market share or better quality. What you can do is experiment and overcome your ignorance, then you can see how the knowledge you have gained can be used to improve or avoid mistakes.

Budgets are evil

Budgets buy projects that buy beans, not capability. Instead a pool of money for experiments is needed. This mitigates risk and makes sure you aren’t throwing your money at white elephant projects that won’t add value.

So a budget becomes how much you are willing to spend on experiments discovering new markets or enhancing what you’ve already got. You can stop spending when you realise it’s not worth it any more and do something else. This is also very liberating.

It does mean that the simpleminded invest a couple of bucks and get four bucks back model doesn’t work. It used to in the days of massive brands and lack of choice, which ended in the 1980’s.

A Lean Manifesto

We acknowledge that lean has become a brand. Despite this we feel it is less compromised than agile has sadly become, and also has a much broader remit that software alone.

A few people have commented on twitter about Deming’s contention that 95% of what you see is down to the system and only 5% is down to the individual. They keep asking where he got the 95% from.

He used to run a course, which is still available as a book: Four Days with Doctor Deming. At the very beginning of the course he invited the participants to play a game with red and white beads. There’s a youtube video describing it here. The you pick up beads with paddles, the workers are rewarded for picking up white beads and punished for red, even ‘fired’.

When you look at the numbers for the game it turns out that the workers have no control over the physical process of selecting the beads. In one trial someone may do really well, and in another badly and get ‘fired’.

In statistics we use confidence limits. When we take a new measurement you look at it and can perform some analysis to say how likely it is that the measurement falls inside the existing set of measurements. Typically we use the 95% confidence limit to say that there is a one in twenty chance that the measurement doesn’t fit what we were expecting. If it falls inside then we have what’s known as the null hypothesis, that there isn’t any noticeable effect for that particular measurement.

Deming’s point was that in most processes any effect that the individual may have is swamped by the system their are part of, in fact the variability they cause is just part of that system overall. So if measurements are falling within the confidence limits you can’t point to one person over another and say they’re better or worse.

So changing things, for better or worse, mean you have to change the entire system. It’s an iron rule, the system always wins. No amount of arbitrary targets, shouting, or wishing can change this. I cover this in more detail in the video talks on my consultancy website.

In any complicated endeavour there are some things that can really cause you to get a little stuck and working on stuff that’s just not important. When working with teams it’s pretty important to ensure that each team has a similar approach to things like how they realise architecture, lay out applications and code, which of the excellent JavaScript libraries they use and so on. Otherwise it starts to create silos and mean that there is waste when you try to manage the flow across teams.

One way of doing this is to have some kind of gatekeeper who inspects everything and makes sure it complies. This is the standard backwards command and control way of assuring quality: do the inspection after you can perform any intervention that might resolve the problem. It also means you have guaranteed that there will be a bottleneck. Of course, you can have it in front of any work, where there is some kind of oversight. This just means the delay is upstream of any value instead of down.

Instead, there’s an old trick, which is to have swat teams. These are teams made up of experienced individuals who know each other well and work together. Their job is to start new projects, but not finish them. They also work with teams that are stuck or lagging to help them get past whatever problems they have.

The swat team hands off to the less experienced team that will finish the job, it means that there is already a body of knowledge of how we approach things, what the architecture is, etc. built into the project. Of course, this will require pairing and patience. But it means that work gets started well, in a standard way, with all of the levers for continuous improvement in place, by people who know how to do this. Then it’s picked up by others who learn what the standard approach is, without a gatekeeper and a lot of bureaucracy.

This is a team version of staff liquidity, which is discussed in the Commitment book. Staff liquidity uses experts’ knowledge and skills in such a way as to make sure there is enough slack to deal with emergencies and still get the work done.

Speaking at Agile Cambridge http://agilecambridge.net/ac2013/programme/ this is September 24-27th, 2013 at Churchill College, Cambridge UK. This is an updated reprise of the “it’s not your fault” talk on the consultancy site. I believe that InfoQ will be filming the session and I’m proud to follow in the footsteps of many people I admire.

I’m attending, but not speaking at, Design it, Build it http://www.dibiconference.com/ which is 7-8th October at Gateshead, UK (the 8th is my birthday).

I’m also going to Lean Conf 2013 http://www.leanconf.co.uk/ which is 26-27th October in Manchester. So, if any readers want to talk to me please seek me out if you are at any of these events, they’re all worth going to.